City’s earners are among the worst hit by recession

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EARNERS in Portsmouth have been among the worst-hit by the recession in the region.

According to figures from the Office for National Statistics, pulled together by the GMB union, employees in Portsmouth now earn an average of 18.5 per cent less than they did in 2008.

It’s worked out according to how much wages have increased by compared to how much it now costs to buy goods and services.

And Lynn Davies, chief executive of Portsmouth’s Citizens’ Advice Bureau, says the statistics are in line with what she and her staff are seeing in their advice centres.

She said: ‘We have some figures ourselves which show that in 2011/12 around 42 per cent of our clients were people on very low incomes of below £15,600.

‘Going back further, in 2010/11 nearly 80 per cent clients had an income of below £15,600.

‘What that says to us is that for debt advice we’re now seeing a wider range of household incomes, and we’re seeing households with high incomes having debt problems, and we’re typically helping a lot more with mortgage advice.

‘Money isn’t going as far, incomes are reducing in real terms and reasons for that are largely to do with employment – pay freezes, reduction in wages, or people being asked to work less.’

The average reduction across the UK is 12.8 per cent, from an average wage of £26,137 in 2008 to £26,664.

That shows income has increased on average by £527 – around two per cent – but during the same time inflation has made our bills 14.8 per cent higher, leaving the 12.8 per cent shortfall.

In Portsmouth, the average wage has actually decreased over the past five years as well. It has reduced from £22,850 to £22,006, which is a fall of £844. When adding the cost of inflation onto that, it means earners in Portsmouth are worse off by a whopping 18.5 per cent.

West Berkshire is the only other area in the south east to come ahead of Portsmouth, with a reduction of 20.4 per cent.

In Hampshire – not including either Portsmouth or Southampton – the figure has reduced by 10.6 per cent with the average wage increasing from £27,810 to £28,964.

Paul Maloney, GMB regional secretary for the south east, said: ‘Consumer spending is the single biggest component of demand in the economy and with the real value of wages from employment falling there is no mystery as to why the economy is in a downward spiral.

‘The replacing of full time permanent jobs with part time and temporary lower paid jobs is part of this.

‘A living wage and pay rises to help hard-pressed families as bills go through the roof are needed to boost the economy and stop the downward spiral.’